The Philadelphia 76ers are the first U.S. professional sports franchise to invest in the eSports arena.
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The Philadelphia 76ers announced on Monday its entry into the eSports arena, the first for a U.S. professional sports franchise.
Along with venture capital firm NextEquity, the 76ers purchased a majority stake in eSports franchises Team Dignitas and Team Apex, a deal that was worth between $7 million and $15 million according to Forbes. The two teams will be combined under the Team Dignitas name and will operate separately from the NBA franchise.
“I think that an organization that has an operating relationship with an NBA team has a distinct competitive advantage in terms of resources, access to corporate partners, and database brand experience,” 76ers CEO Scott O’Neil said to SportsBusiness Journal.
According to O’Neil, team executives will assist in sponsorship sales in addition to helping Dignitas create and distribute content, which will be seen as an important revenue stream for the eSports franchise.
“We have an infrastructure of a mature business that’s going to be laid on top of an incredibly attractive business with a growing fan base,” O’Neil said to Forbes. “We think the missing ingredient in making this growth on the fan side and player side is the actual infrastructure. We will put dedicated staff on the business. We have built a reputation over time as a group that does big, innovative deals and a group that has relationships throughout corporate America.”
Greg Richardson—who is the founder of free mobile game video developer Rumble Entertainment—will serve as chairman of the newly-acquired eSports franchise while Team Dignitas managing director Michael O’Dell and Apex’s David and Michael Slan will continue as large minority shareholders. Dignitas has teams that play in five games including CS:GO, League of Legends, Overwatch, Heroes of the Storm and Smite.
Over the past few years, 76ers owners Josh Harris and David Blitzer have acquired seven franchises, including the 76ers and New Jersey Devils, English Premier League’s Crystal Palace and a couple of minor league teams.
In 2016, a number of current and former NBA players have also entered eSports, including Brooklyn Nets point guard Jeremy Lin recently endorsing a team and Boston Celtics forward Jonas Jerebko purchasing a franchise. In May, current NBA analyst Shaquille O’Neal invested in NRG eSports.